This week we turn to Michael Lewitt of HCM Capital for a very insightful letter on the current credit crisis. As I wrote on Friday, it is important for anyone with any involvement in the financial world to pay attention to what is going on in the credit markets. I think it is going to have far more impact than most observers apparently believe.
Michael E. Lewitt is the Managing Member and President of HCM (Hegemony Capital Management). You can read his letter at www.hegcap.com.
I should note that readers will get a second Outside the Box tomorrow morning. We have never done this, but there are just two very good letters in my box demanding to be shared. I think readers will approve the extra material this one time. I am sure you will appreciate Michael's work.
John Mauldin, Editor
Outside the Box
The Wages of Financial Sin
"The western world has embarked on a speculative journey for which all the historical precedents are ominous."
Make no mistake about it - if the Federal Reserve is holding back on interest rate cuts because of near-term inflation fears, it will be fiddling while Rome burns. The collapse of the structured finance edifice must be understood as a highly deflationary event. The sell-off in…